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Letter of Engagement for Tax Preparation 2005

Thank you for choosing Lawrence Associates as your tax professional. We are pleased to have you as a client. This letter will confirm our understanding of the terms of and the nature and extent of the services that we will provide.

We will prepare your tax year 2004 Federal and California income returns (and additional returns if required) from information you furnish. We will process the returns and provide you with copies for your records and copies for you to file with the required jurisdictions. We will not audit or otherwise verify the data you submit, but will rely on the information you provide.

You are responsible for providing, in a timely manner, the complete information needed to prepare your returns. You agree to report all your taxable income, including any bartering, partnership interests, sales of business or personal assets, and all investment income from all sources. You also agree to provide information about any person working in your household. If you are unable to provide all required information by the twentieth of any month preceding a month in which a return is due, you understand that a filing extension may be required and that the return may not be completed by the filing date.

You agree that if you claim a deduction for travel, automobile or computer expenses, business gifts, entertainment, or charitable deductions, you must keep timely and appropriate records and receipts. If you use any asset for both business and personal purposes, you are required to substantiate the deduction by adequate records or evidence. If you claim any such deduction, you represent that you have the required evidence. You are solely responsible for retaining the supporting documents and other substantiation to present to the taxing authorities in the case of an audit. Should you have any questions on what will satisfy these requirements, we will be happy to advise you.

We will exercise due diligence in interpreting all tax rules and regulations that may affect the preparation of your return, and will resolve questions of interpretation in your favor if there is reasonable justification to do so. We will keep copies of your return as required by law. Finally, when you sign the return, you declare that you have examined the return, including all the accompanying schedules and statements, and that they are true, correct, and complete, to the best of your knowledge and belief.

Fees for our services are at our standard rate for tax preparation, with a minimum fee of $150. A copy of our fee schedule is available on request. Full payment is due when your returns are completed, unless you make other arrangements in advance. A retainer of 50% of the estimated fee may be required of new clients or clients requiring multiple year preparation. We can accept Visa and MasterCard payments in the office but not, unfortunately, over the telephone. If your return is audited and we have made an error, we will refund your fees up to the amount of penalty our error may have cost you, provided that you have furnished the relevant information as shown in our files. We do not reimburse additional tax or interest due.

You are aware that Lawrence Associates is required to electronically file all returns that qualify for e-filing. You agree to having your return electronically files, unless you sign and return Form 8454, “E-File Opt-Out Record.”

We will be available to answer your inquiries and to consult with you on tax matters throughout the year. To encourage you to consult us regarding the tax consequences of any major action you are contemplating, we do not charge an additional fee for routine consultations. We reserve the right to bill at our regular hourly rate ($165/hour in 2005) for matters requiring substantial research, but no work for additional charges will be begun without your prior consent.

Your returns are, of course, subject to review by tax authorities. You agree to inform us immediately of any notices from the Internal Revenue Service, Franchise Tax Board, or other state taxing agencies. In many cases, the issues can be resolved quickly and simply if prompt action is taken. Therefore, we ask that you sign a power of attorney that allows the Internal Revenue Service to send a copy of any correspondence to us as well as to you. In the event of an examination, we are available to represent you, with billing at our standard rates.

Lawrence Associates will maintain the privacy of your information as required by law. However, you agree to allow Lawrence Associates to share your name, address, telephone number, and e-mail address with other firms only if needed for our administrative purposes. Lawrence Associates will not sell or share your information for outside commercial purposes.

We appreciate your business and look forward to a long and mutually satisfying relationship.

Sincerely,


Irene Lawrence, EA